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Thursday, September 23, 2010

Car Insurance for Children Away at University

My wife and I each have a car. My son who recently went away to university was listed on our car insurance as an occasional driver of both vehicles. We pay a hefty premium for this. When he went away to university, I thought this would reduce the premium considerably, but the reduction is less than I thought it would be.

Just to be clear, our son did not take one of the cars with him. He attends school about 500 km away. We expect to see him between terms for a week or two, possibly a weekend during each term, and possibly for the summer depending on where he finds a summer job. Our insurance covers him to drive our cars when he is home.

For his change in status, our insurance company reduced the part of the premium specific to my son’s coverage by 40%. I suppose that this is better than nothing, but it’s less than I had hoped. He clearly won’t be driving the cars 60% as much as he did when he lived at home.

If any readers are in the same type of situation we’re in, I’d be interested in hearing about your experience. Is 40% an industry-wide standard figure? Perhaps it is worth switching insurance companies if others have better terms for this situation.

@Alex C: The main problem is that it's hard to predict exactly when I would need the coverage. If I happen to be in the area and drop in on him, I wouldn't want to tell him he couldn't drive my car. Turning the insurance on and off several times per year would be a problem as well. As long as he uses our home as his official residence, he has to be named on our insurance to be covered when he drives our cars (as I understand the rules).